Distribution of Irrevocable Trust

[FeistyOne]

Jurisdiction

Massachusetts

I am executor of my mom's will & irrevocable income only trust. All asessts are now complete (money from sale of house). There are 3 trustees on the account, I am executor, my brother and a niece. In the trust it says that my sister (niece's mom) is to put my sister's share in a trust for her till 70. This is so my sister won't loose her government benefits. My niece wants my sister's share to use it at her disgrastion for my sister but not in a trust as my mom's trust says. Don't I legally have to put my sisters share into some sort of special needs trust set up for my sister and then my niece can have control over it? And not give my niece the money to put in her own bank account. What happens if my niece passes before my sister then the money will go to my nieces husband legally not to my sister. Also if my niece divorces it will have to be split between her and her husband and my sister will have lost her share. Please advise

 

[Zigner]

Follow the trust instructions.

 

[FeistyOne]

Thank You, I am following the trust instructions, however the niece wants to get the money and hold it herself for my sister, and my brother wants me to do that also as my niece wishes. Not as my mom intended.

 

[Zigner]

Thank You, I am following the trust instructions, however the niece wants to get the money and hold it herself for my sister, and my brother wants me to do that also as my niece wishes. Not as my mom intended.

Your duty (legally and morally) is to follow the terms of the trust.

 

[zddoodah]

I am executor of my mom's will & irrevocable income only trust.

I assume you meant to write that you are executor of the estate and trustee of the trust. Correct? If so, were you appointed by the court to serve as executor? Or were you merely nominated in the will? If the court appointed you, did you have to post a bond? What is the relationship between the trust and will?

There are 3 trustees on the account, I am executor, my brother and a niece.

What account are you referring to? What does it mean to be a trustee on an account? Did you mean that all three of your are co-trustees of the trust and that the trust owns a bank account in which all of the trust estate's cash assets have been deposited? Roughly how much money are we talking about?

In the trust it says that my sister (niece's mom) is to put my sister's share in a trust for her till 70.

"Her" being your sister or your mother or your niece?

This is so my sister won't loose her government benefits.

What sorts of benefits?

My niece wants my sister's share to use it at her disgrastion for my sister but not in a trust as my mom's trust says.

I assume "disgrastion" was supposed to be "discretion." Regardless, if your niece wants you/the trustee(s) of the trust to do something different than what the trust says, then you should politely tell her no, unless she can convince everyone with an interest in the matter to sign a release (which should be drafted by an attorney) that consents to what she wants and expressly absolves you of all liability.

Don't I legally have to put my sisters share into some sort of special needs trust set up for my sister and then my niece can have control over it?

I haven't the slightest idea, and neither will anyone else who hasn't read the trust instrument and who does not have answers to the questions I've asked.

What happens if my niece passes before my sister then the money will go to my nieces husband legally not to my sister.

Again, I have no idea.

Also if my niece divorces it will have to be split between her and her husband

I'm not sure why you would think that.

Administering a trust - especially when there's a good chunk of money in play - is NOT a good DIY project. When I did this for my sister's trust a while back, I hired an attorney who specialized in trust administration to assist me even though I'm an attorney myself. I don't remember how much the fees were, but it was money well spent.

 

[Tax Counsel]

Administering a trust - especially when there's a good chunk of money in play - is NOT a good DIY project.

I especially want to emphasize this. If the administrator screws up the administrator may be personally liable for it. Take the trust document to a trust attorney. The trust pays the legal bills and you get the help you need to get it right.

 

[FeistyOne]

"Think the best thing to do would be to simply distribute Donna's share and Frank's share and have both of them resign as trustees. This would avoid the decanting issue and would leave ashley the only remaining trustee. At that point, she can take control and invest the trust principal for Juliet's benefit as she sees fit and subject to her fiduciary obligations." My nieces attorney said this. Yes there is a lot of money involved. $500000+ yes I have an attorney too and I am legally executor. I guess I am afraid she will close the trust and put the money in her name(neice) and use it (she also is married and has sneaky husband). I feel my mom wanted a trust for my sister in her name and the daughter to oversee it.

 

[army judge]

"Think the best thing to do would be to simply distribute Donna's share and Frank's share and have both of them resign as trustees. This would avoid the decanting issue and would leave ashley the only remaining trustee

I'd NOT even consider the above declaration, when
@Tax Counsel 's suggestion, noted below, if followed, is foolproof!!!

Take the trust document to a trust attorney. The trust pays the legal bills and you get the help you need to get it right.

Should do YOU foolishly anything OTHER than what @Tax Counsel suggested, you'll regret it rapidly!!!!

 

[FeistyOne]

I assume you meant to write that you are executor of the estate and trustee of the trust. Correct? If so, were you appointed by the court to serve as executor? Or were you merely nominated in the will? If the court appointed you, did you have to post a bond? What is the relationship between the trust and will?




What account are you referring to? What does it mean to be a trustee on an account? Did you mean that all three of your are co-trustees of the trust and that the trust owns a bank account in which all of the trust estate's cash assets have been deposited? Roughly how much money are we talking about?




"Her" being your sister or your mother or your niece?




What sorts of benefits?




I assume "disgrastion" was supposed to be "discretion." Regardless, if your niece wants you/the trustee(s) of the trust to do something different than what the trust says, then you should politely tell her no, unless she can convince everyone with an interest in the matter to sign a release (which should be drafted by an attorney) that consents to what she wants and expressly absolves you of all liability.




I haven't the slightest idea, and neither will anyone else who hasn't read the trust instrument and who does not have answers to the questions I've asked.




Again, I have no idea.




I'm not sure why you would think that.

Administering a trust - especially when there's a good chunk of money in play - is NOT a good DIY project. When I did this for my sister's trust a while back, I hired an attorney who specialized in trust administration to assist me even though I'm an attorney myself. I don't remember how much the fees were, but it was money well spent.

I hired an attorney and his and theirs brother and nieces suggestions is to keep trust as is. Pay us my brother and I and leave the rest for the rest for the neice in the same trust to take care of her mom, my sister till 70 as the trust says. However they also want to give full authority to the neice to transfer or do what she likes with the funds under her name.

 

[Zigner]

I hired an attorney and his and theirs brother and nieces suggestions is to keep trust as is. Pay us my brother and I and leave the rest for the rest for the neice in the same trust to take care of her mom, my sister till 70 as the trust says. However they also want to give full authority to the neice to transfer or do what she likes with the funds under her name.

If that's a long-winded way of saying "Do as the trust says," then it sounds like you got good advice.